Sunday, November 04, 2012

From Libertarianism to Tyranny / A Response to [T]he Barefoot Bum, P.2

Continuing on from my thoughts below regarding Larry's view of Libertarianism and it's path to tyranny (see P.1 below), I'd like to now offer two other potential solutions to circumvent that path which I believe are still remaining consistent with the premises of Libertarianism.

Let's suppose that, contrary to the argument I gave below against Libertarianism in a vacuum, that we granted the wholesale implementation of the Libertarian premise therefore leaving ourselves open to the charges Larry has leveled. Let's recall then that the charge is Libertarian does nothing to prevent runaway absentee ownership, thus in effect creating a privileged ownership class. In essence Libertarianism implicitly allows the creation of private property monopolies, not to mention corporate / business monopolies.

I believe a defense of this may be rather simple in that, there's nothing within the Libertarian premise which would prevent the creation of labor monopolies. At least in theory a labor monopoly could work on a large institution or corporations ability to acquire and monopolize absentee ownership as without the means to produce or purchase, large institutions cannot monopolize without labor monopoly consent and/or labor assistance.

Second, granting that labor monopolies could be a potential reality (and so far as I can see there's nothing within the Libertarian premise to prevent it) there is additionally nothing to prevent blackmail. In fact there is some consent amongst Libertarians that blackmail which does not involve threat or harm, but perhaps more towards reputation and in this case the threat of work, is completely allowable. As such blackmail, specifically though labor monopolies, could be employed in some tactical manner to prevent monopolies on absentee ownership.

Of course where all this sounds rather corrupt, and admittedly I haven't thought it through all the way to the bottom, it could at least in theory work as not just a preventive measure, but as a measure to keep both sides honest.

14 comments:

there's nothing within the Libertarian premise which would prevent the creation of labor monopolies.

First, what is a labor monopoly?

A property monopoly is one where a single agent or coordinated group exercises absentee ownership over all the means of production of a particular commodity (or all produced instances of that commodity).

Excluding the most extreme Libertarianism that suborns actual chattel slavery, one cannot have absentee ownership directly over another's actual labor power*; only physical property can actually be owned. So a labor monopoly in this sense doesn't seem possible.

*Which would restrict alienability (right to sell) over one's ownership of one's own body.

If we view a labor monopoly as a union, history has shown without exception that without strong central legal protection for unions and the process of unionization, owners of the means of production have too much power in the short term to break unions. So seeing unions as a counterbalance to property monopolies doesn't seem practically useful.

By "labor monopoly" I essentially mean something along the lines of a union; people can just walk out. I'm simply trying to keep the language the same.

When you say "strong legal protection for unions", what are you suggesting they need strong legal protection from? The only contingency there is in a purely Libertarian environment is who has the means to "wait it out" the longest.

... Additionally, there's yet another contingency that presses upon this within Libertarianism, which is the idea that there would be no intellectual property rights. So the road towards monopolizing the means of production could easily become stumped from the inability to monopolize on the patents and intellectual properties.

So in that case, in the development stage of ideas there's nothing stopping competition over the means to produce the products of those ideas. It seems reasonable to assume that at least in theory, this could prevent corporations from becoming the giants we see today. Rather than see the spread of factories from one single entity producing it's patented goods, you'd see several individually owned entities producing those goods. The strength of those business and corporate entities would then be relative to their innovative abilities to produce those products (their productivity) at cheaper prices as opposed to merely owning the intellectual properties.

In the above case then, productivity becomes THE mode of competition, not ideas. As such, the threat of union walkouts poses a much bigger threat for those who control the means of production.

If you're not the only one who can produce a Snickers candy bar, then corporate survival all rests upon your innovative ability to produce one and support the demand. A week with your candy bar line down due to union stress could mean other vendors stepping into your place.

Essentially I'd argue that instead of insanely large corporations like Snickers, Kraft, Frito Lay, etc., you get several smaller entities producing those goods. The only thing giving those organizations the ability to get so large is their ownership over the "recipe", take away that and again, it all come down to producibility (and of course noone owns the rights to those innovations either).

In the above case then, productivity becomes THE mode of competition, not ideas. As such, the threat of union walkouts poses a much bigger threat for those who control the means of production.

If you're not the only one who can produce a Snickers candy bar, then corporate survival all rests upon your innovative ability to produce one and support the demand. A week with your candy bar line down due to union stress could mean other vendors stepping into your place.

In today globalized world, there's little to stop a multi-national candy bar maker from switching production from country X to country Y.

But consider something more serious than candy - like your water supply. In every single country that the IMF has 'helped', the IMF has forced the privatization of water supply. Imagine a company who can shut down all local water, a company whose owners don't even live in the same country.

And what about industries that are 'too big to fail'? Railways, roads, airports, national telecom infrastructure etc were all privatized under the assumption that increased competition will somehow result in a better run company.

But when a CEOs know a government, whether libertarian or communist, can not allow essential services to fail, they start taking high risks for short term profits. And why not? Run the airport into the ground and the government will have to bail you out because a city needs a airport.

So I don't buy the idea that competition will prevent a monopoly or will result in a more efficient company.

Most people associate Guinness with Ireland. What they don't know, is that Guinness ruthlessly took over every rival brewery in the country, then spent decades buying every piece of advertising associated with a non-Guinness product and destroying it piece by piece until there was only Guinness left. This is the nature of capitalism - companies cannot stay static, they have to grow and consume other companies to survive. Small companies merge to form a more 'efficient' company. Companies are bought out by different industries just for their land or location. I don't think the lack of intellectual property rights will do much to prevent this practice because it's inbuilt into capitalism itself. I don't think McDonalds for example is often said to be a real estate company not a fast food chain because they buy the most expensive land around the world.

I also don't think a labor monopoly can happen because 1) The modern workplace is organized in response to the social upheaval that occurred during the 20's and 30's and it's designed to discourage labor movements through individualization. 2) Companies have significant tools to deploy to split the workforce into fractions eg pitting older workers who care about pensions against the younger who want their money now. 3) A significant number of workers will themselves be libertarian and will not want a union.

And even if a labor monopoly did happen, it still wouldn't be effective because 1) With globalization, companies can plan redundant systems in different countries to take the slack. 2) Companies can force strikes at the most opportunist moment for themselves. In the UK, Margret Thatcher for example built up the nations coal reserves before forcing a coal miners strike because she was determined to break the power of the unions. And she did. Mostly. 3) Historically the employers class has joined together against the workers because it's in their best interests.

Well, I guess I’d have to make the point that you can’t conflate corporatism with capitalism. In addition to the thinking that intellectual property rights would prevent large scale corporations, there would be no corporatism either. I would suggest that your thinking, “This is the nature of capitalism - companies cannot stay static, they have to grow and consume other companies to survive.” is more in line with a corporatism model than it is with a capitalist one (and of course that’s largely the model we’re operating within today). Corporations, with all their money and influence, have the ability to lobby and enact legislation that helps their own causes, all the while hindering the competition. I would suggest that this sort of activity would be completely out of the question in a Libertarian model and therefore a moot point.

You’ve said a lot here, but let me grab one last other quick point, and that would be industries that are too big to fail. I guess I just don’t see that there’s any such thing and therefore again it would be a moot point. There’s no such idea in Libertarianism that such and such an industry is too big to fail, therefore we’ll always be there to back it up which in turn leads to risky company practices. Take away the government, and you take away the risky practice, that’s the point.

Well, I guess I’d have to make the point that you can’t conflate corporatism with capitalism. In addition to the thinking that intellectual property rights would prevent large scale corporations, there would be no corporatism either. I would suggest that your thinking, “This is the nature of capitalism - companies cannot stay static, they have to grow and consume other companies to survive.” is more in line with a corporatism model than it is with a capitalist one (and of course that’s largely the model we’re operating within today). Corporations, with all their money and influence, have the ability to lobby and enact legislation that helps their own causes, all the while hindering the competition. I would suggest that this sort of activity would be completely out of the question in a Libertarian model and therefore a moot point.

Your labour monopoly idea is a form of corporatism with a union forming a clear corporate body. http://en.wikipedia.org/wiki/CorporatismI don't see how the Libertarian model can prevent the growth of large economic corporations (ie big ass rich companies) . Imagine a land filled with rival tribes of humans. The Libertarian claim is fair competition between tribes will prevent the rise of a state or of one dominant tribe. But this can very rarely happen because the very act of competition forces growth - it's grow or be consumed. Tribes will consume each other over time. It’s pure Darwinism You’ve said a lot here, but let me grab one last other quick point, and that would be industries that are too big to fail. I guess I just don’t see that there’s any such thing and therefore again it would be a moot point. There’s no such idea in Libertarianism that such and such an industry is too big to fail, therefore we’ll always be there to back it up which in turn leads to risky company practices. Take away the government, and you take away the risky practice, that’s the point.

Airports, water supply, major roads, health service, social services, pension schemes etc are all too important for governments to allow to fail. Imagine your regional power supplier going bust.

The reality of why I despise political conversations is slowly starting to dawn on me now, haha.

Regarding a labor monopoly, let me change my terms a bit. Within the Libertarian "doctrine", there's nothing unlawful (and nothing preventing) a group of people from saying, fuck it, we're not coming into work today because, yadda-yadda-yadda. Now, perhaps you're right in that unions per se are forms of corporatism, but in the sense I just described, Libertarianism does not (and should not) account and legislate for. But I'll have to give this some further thought and come back to it.

Regarding your idea of competition leading to ever growing organizations and into multi-national corporations (essentially). Well, on the one hand there's no way to grow infinitely large, eventually all things (government and otherwise) collapse under their own weight, and history has shown us that. Secondly there's not a whole lot of empirical evidence out there to tell us what would happen outside of theory (which I'm lacking at the moment, but digging holes in what I've said certainly helps to think through it). Anyway, I'll get back to this. But in any case, I'm going to say we're assuming on both sides here until we can come up with something better and less wishy-washy.

Finally you said:"Airports, water supply, major roads, health service, social services, pension schemes etc are all too important for governments to allow to fail. Imagine your regional power supplier going bust."

The problem with this is, it assumes that without Government things are more likely to fail, or when they fail will be failed for much longer. But that's an implicit claim you'd have to back up with something, otherwise you're just arm waving. Which of course is the nature of political theory, but what the hey, let's do this.

Regarding your idea of competition leading to ever growing organizations and into multi-national corporations (essentially). Well, on the one hand there's no way to grow infinitely large, eventually all things (government and otherwise) collapse under their own weight, and history has shown us that.

But this surely isn't a good thing? Because when corporations collapse, they cause chaos for investors and the wider markets and a corporation can still grow quite large and powerful before it collapses. Isn't some government regulation better than pure competition to manage and limit this growth and collapse?

Secondly there's not a whole lot of empirical evidence out there to tell us what would happen outside of theory (which I'm lacking at the moment, but digging holes in what I've said certainly helps to think through it). Anyway, I'll get back to this. But in any case, I'm going to say we're assuming on both sides here until we can come up with something better and less wishy-washy.

Well, the various Wall Street crises during the 90's read like a who’s who of free market libertarians. And the laissez-faire system of the 18th and 19th century comes very close to libertarisam.http://en.wikipedia.org/wiki/Laissez-faire

"Airports, water supply, major roads, health service, social services, pension schemes etc are all too important for governments to allow to fail. Imagine your regional power supplier going bust."The problem with this is, it assumes that without Government things are more likely to fail, or when they fail will be failed for much longer. But that's an implicit claim you'd have to back up with something, otherwise you're just arm waving. Which of course is the nature of political theory, but what the hey, let's do this.

Well, no - the claim is companies can adapt riskier short term but high profit policies because they know governments will bail them out should those policies fail. The UK went through a large libertarian period under Thatcher and then New Labour. They sold and out-sourced state services (which cost a fortune in lawyer fees) only to buy back or bail out the same companies a decade later.

As best I understand, in a Libertarian society, ownership is not a fully social process: no one but the buyer and seller can approve or deny the transaction, and the owner may forcibly restrict its use at his or her arbitrary discretion. On the other hand, unionization is by definition a fully social process: a certain number of people must all agree to the union. Furthermore, because the union as a whole does not own property (it cannot own the labor of its members), it has no basis for enforcing its own arbitrary discretion.

Unions, as we have discovered empirically, require two key legal protections: the right to organize without being fired or disciplined, and organizational ownership rights over the physical property, specifically the right to permit or deny anyone, even non-union members, from working there. Without these rights, unions cannot effectively form or act strike, and thus exert political pressure.

That the owner of the physical property can enforce his or her arbitrary choices, and that the union cannot enforce its arbitrary choices, is an enormous asymmetry of power. Right, as Thucydides tells us*, is a question only between equals in power. Absent equality of power, the strong do as they please, and the weak suffer what they must. Unrestricted absentee ownership of the physical means of production makes it nearly impossible for workers to become the equals in power of absentee owners, and effectively denies them rights.

The real underlying issue here has nothing to do with intellectual property per se, but with protecting capital from catastrophic competition. Intellectual property rights evolved as one way to protect capital investment.

If you study even a little economics, you know that all economic decisions happen at the margin. The problem, of course, is that once deployed, capital no longer contributes to the marginal cost of the product: capital is a sunk cost. As we discovered during the railroad boom of the 19th century**, in a world of perfect competition, with large capital investment, companies must set their prices to the marginal cost of carrying freight and passengers, without factoring in the enormous cost of infrastructure and equipment. Without some political system (of which intellectual property is one modern component) to protect capital from devastating perfect competition, all producers, not just the "weak", will go bankrupt.

Second, as we move to more and more abstract objects of production, i.e. the production of intellectual property, some political means must be found to account for investment in its production. If all we have to are property rights, and intellectual property isn't property properly so called, then there is no way to account for investment in intellectual property.

Fundamentally, we need to find some way to shield large capital investment from perfect competition; perfect competition fundamentally undermines large capital investment. Alternatively, we could simply abandon large capital investment altogether, but I kinda like computers, airplanes, the internet, and Ikea, not to mention cities and industrial food production.

Furthermore, without some way to account for investment in intellectual property production, no one will produce it. We could forego investment in intellectual property, but again, I like movies, television shows, computer software, and academic journals.